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Moneta IPO revives ‘snoozy’ Prague Stock Exchange

Moneta Money Bank’s initial public offering (IPO) on the Prague Stock Exchange (PSE) blew the cobwebs away from trading desks that had not seen much action for a long time.

What amounted to the largest IPO on the PSE since 2008 saw trading volumes reach nearly two billion crowns in no time. At the current rate of share dealing on the Czech stock market, it represented nearly a week’s average turnover of all share titles. Overall, the trading floor subscribed its largest one-day share volume in the past six months.

Experts said the interest in the shares of Moneta – formerly named GE Money Bank, it is being sold by General Electric, which is shifting away from financial activity globally – might stem from a battle between big funds or massive interest from retail investors. The initial trading day saw the share price remain practically unchanged because Moneta conducted its debut without moving the quotation.

“On the one hand, this could have been about huge sales to big foreign hedge funds betting on the IPO effect, in other words strong price growth after the launch. Against that could stand big index funds buying in the expectation of the shares being added to regional indexes,” said one trader, who wished to remain anonymous. “Part of the issue could also have been bought by the issue managers themselves, so that they can gradually release shares on the market,” said another trader, also speaking on condition of anonymity. He referred to how the issue managers might compensate for lower interest from the outside.

Originally published in E15 weekly, economic and business newsmagazine. Author: Jaroslav Bukovský

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